$210 What is cost of goods sold using the FIFO method of inventory costing? Aging of accounts receivable method. D. 1. E) None of the above is correct. $2,200 $80,000, Jacobs Company borrowed $100,000 at 8 percent interest for three months. How much is Clark's 2011 bad debt expense? D) $18,455 A company purchased $1,800 of merchandise on July 5 with terms 2/10, n/30. $53,349 D. D. Revenue recognition accounting. $113,000 1. B. A. decrease assets, $103,000; decrease liabilities, $103,000. A. the July transactions. Total revenues for the period are $60,200, total expenses are $42,300, and withdrawals are $11,000. The journal entry to record the declaration of the cash dividend is: Market value of the stock was$12. The stated rate of interest was 10% and the market rate 11%. B. 1. E) on the date of issuance. Net income will be overstated, but there would be no affect on total assets. A) $16,000 The entry to close the Income Summary account at the end of the year, after revenue and expense accounts have been closed, is: Multiple Choice Debit T . 1. D. D. If earnings per share equals $5.00, then the maximum dividend payment would be $5.00. Upon review of the most recent bank statement, you discover that you recently received an NSF check from a customer. A. B. A. A. $2,000,000 in the Current Liability section. A. B. a decrease in liabilities and increase in stockholders' equity. C. a. $63,000 Marlow Company purchased a point of sale system on January 1 for $3,400. 10 percent discount for payment within 30 days Discuss how the transaction below impact the accounting equation. Transaction analysis, journal entries, trial balance \text{Delivery Service Revenue} && 283,470\\ There are 50 units of Item B having a cost of $50 per unit and a replacement cost of $55 per unit. B) $679,575 A. auditors provide direct financial advice to potential investors. Double-declining-balance depreciation is used. $66,667. Cost of goods sold to be understated and net income to be understated. 1. B. On July 1, 2005, when the annual market interest rate was 8%, High Tech, Inc., issued 10-year bonds with a par value of $5,000,000. E. B. C. Closing accounts. Decrease of $75,000 Sales discounts with terms 2/10, n/30 mean: Debit Common Dividend Payable $12,000; credit Retained Earnings $12,000. What entry should be recorded on February 1 to record the write-off assuming the company uses the allowance method? A. a liability. A. An increase in an asset and a decrease in another asset. If the purchase was recorded in the Prepaid Insurance account, and the company records adjustments only at year-end, the adjusting entry at the end of the first year is: a. Debit Salaries Expense, $5,400; credit Salaries Payable, $5,400. It is computed by dividing net income by weighted average common shares outstanding. The vehicle has an estimated 6-year life and a $4,000 residual value. b. The bond matures in 10 years. The owner's capital account before closing had a balance of $297,000. Betterman's turnover is improving. The owner's capital account before closing had a balance of $297,000. E) None of the above. beginning inventory and net purchases during the period. Its supplier's catalog indicates a list price of $500 per unit on merchandise Jasper intends to purchase, and offers a 30% trade discount for large quantity purchases. Retained Earnings. A. 1. E. Raw materials Zephyr, Withdrawals 43,000, Net Income $119,600+ \hline \text { Internet & Phone Bundle } & 1,198.80 \\ E. Zack Corporation uses the effective-interest method of amortization. Accrued severance pay and fringes for employees who will be terminated. 1. The ending retained earnings balance after closing is: $200,000 Business: tara westmont the stockholder of tiptoe shoes inc had . Minor Company installs a machine in its factory at the beginning of the year at a cost of $135,000. No entry is made for this transaction. A) $656,758 Either (b) or (c). $12,000 preferred; $18,000 common. B. auditors have the primary responsibility for the information contained in financial statements. How much is the year 8 depreciation expense assuming use of the straight-line depreciation method? Tara Westmont, the proprietor of Tiptoe Shoes, had annual revenues of $203,000, expenses of $112,700, and withdrew $25,200 from the business during the current year. Balance Sheet and Statement of Owner's Equity - credit; and Income Statement - credit. A. debit Unearned Fees, $1,548; credit Fees Earned, $1,548. Earning revenue for services performed. D. The journal entry to write-down inventory increases cost of goods sold. D. It is created as a result of the adjusting entry to record bad debt expense. D. B. B. increase total assets. e. Debit Accounts Payable $1,600; credit Cash $1,600. Real accounts. = $189,000-$105,700 D. A. 2.50 A. $10,000 D. Tinker's inventory turnover during 2014 was closest to: The journal entry to write-down inventory decreases current assets. consumers upwards of 222 billion dollars per year. Jan 20 160 units were purchased at $11 per unit D. They want to maximize the total depreciation expense over the life of the asset. The 2007 income statement should report supplies expense amounting to A. Stockholders maintain proportionate ownership percentages. Sale of additional stock to investors. drives up the domestic price of sugar and increases their $77,000 Which is the correct order of the steps in the accounting cycle during the accounting period? D. Affect cash accounts. A reduction in current liabilities. $24,000. Transaction analysis of operating expenses for 2010 should reflect only the following: C. $22.8 billion C. C. Recording the expense in December when it is incurred will increase expenses A. D. $ 700. Cash receipts from customers exceeded cash payments to suppliers. Long-term liabilities. E. $63,000 c. $81,000 d. $360,300 e. $378,300 (2) c. Debit Allowance for Doubtful Accounts $2,300; credit Accounts Receivable $2,300, On February 1, a customer's account balance of $2,300 was deemed to be uncollectible. D. At the beginning of the eighth year, a major overhaul on it was completed at a cost of $8,400, and the total estimated useful life was changed to 9 years with the residual value changed to zero. 1. C) $82,300 (2) and (3) $1,200 debit. What amount would be recorded as bad debt expense for the current period? The owner's capital account before closing had a balance of $298,000. . 1. Alice, the owner of a small restaurant, employs four different servers on her day shift. Tara Westmont, the proprietor of Tiptoe Shoes, had annual revenues of $185.000, expenses of $103.700. D. $240,000, 1. A. Topic: Recording Closing Entries Question 5 0 out of 4 points Tara Westmont, the proprietor of Tiptoe Shoes, had annual revenues of $185,000, expenses of $103,700, and withdrew $18,000 from the business during the current year. Credit (Revenues) $189,000, Accounting Week 4 (Adjusting and Closing Proc, Accounting: Chapter 5: Adjustments ad the wor, Claudia Bienias Gilbertson, Debra Gentene, Mark W Lehman, Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield. $1,060 D. Transaction analysis, journal entries, posting to the ledger. A. $680. $800 C. $6,000 Landseeker's Restaurants reported cost of goods sold of $322 million and accounts payable of $83 million for 2011. On January 1, 2005, the Homer-Preston Company issued 5-year bonds with a face value of $400,000, a stated rate of 8%, and interest payments due every six months on June 30 and December 31. $1,200. D. $50,000. Which one is motivated by an intrinsic reward? D. an increase in stockholders' equity and increase in an asset. Callable preferred stock. $227,000 B. A. $8,800. The stock sold for $20 per share. This system has a useful life of 10 years and a salvage value of $400. C. $2,200 debit. On July 7, it returned $200 worth of merchandise. What is Wilson's fixed asset turnover ratio? The Wilson Company has provided the following information: D. When the replacement cost of inventory drops below the cost shown in the financial records, total assets are reduced. The owner's capital. $81,600. B. It is a liability account. \text{Accumulated DepreciationBuilding} && 53,400\\ It falls into the five-year category for MACRS depreciation. b. C. A. D. Sales returns and allowances Decreases the Bonds Payable account. \text{Accumulated DepreciationTrucks} && 30,900\\ The owners and the business are separate legal entities. A. Which statement regarding dividends is false? A stock dividend As of March 1, outstanding checks total $22,000 and deposits in transit total $15,000. Reflects a decrease in amount due to a supplier. A company purchased $1,800 of merchandise on July 5 with terms 2/10, n/30. The owner's capital account before closing had a balance of $313,000. Treasury stock reduces total equity on the balance sheet. Prepare adjusting, closing, and, when necessary, reversing entries from the work sheet. $188,000 B. The company declared a $27,000 dividend on its noncumulative, nonparticipating preferred stock. E. $600. $470 On October 2, it purchased 20 units at $205 each. $130,000 (Total cost to allocate = $150,000 + ($150,000 * .07) + 5,000 = $165,500). The Adjustments columns contain entries for the following: K. Canopy, the proprietor of Canopy Services, withdrew $6,900 from the business during the current year. 1. d. Debit Merchandise Inventory $1,500; credit Cash $1,500. The adjusting entry needed on December 31 is: d. Credit to Unearned Revenue for $60,000. 1. A. results in a transfer of retained earnings to contributed capital. TaraWestmont,theproprietorofTiptoeShoes,had annualrevenuesof$185,000, expensesof$103,700, and withdrew$18,000 fromthebusinessduringthecurrent year.Theowner'scapitalaccountbeforeclosinghada balanceof$297,000. (2) A. During the month of May, total credits to Accounts Receivable were $52,000 from customer payments. Preferred stock which confers rights to prior periods' unpaid dividends even if they were not declared is called: B. d. $570 What is the value of cost of goods sold? The accounts receivable balance on December 31, 2011 was $175,000. C. $104,000. 1. $ 883. A building was purchased in 2014 and had an estimated useful life of 25 years and a residual value of $20,000. and withdrew $18.000 from the business during the current year. D. Preferred stock typically has a fixed dividend rate. (ii) Total assets remains the same b. B. How much was Roscoe's March 1, 2010 cash balance on their books? E. Total assets increase and equity decreases. Using the FIFO perpetual inventory method, what was the cost of the 22 units sold? The company purchased $9,750 of merchandise on August 7 with terms 1/10, n/30. Net sales will not change \textbf{Siglo Delivery Service}\\ 1. 3.99 B. A disclosure note is required when the loss is reasonably possible and the amount cannot be reasonably estimated. A. Net Income$119,600 10 percent discount for payment within 30 days. Goodwill is not reported unless purchased in an exchange. When a stock dividend (on par value stock) is declared and issued Natural resources 104. B. $229,800 $544. a. Debit Accounts Payable $1,500; credit Cash $1,500. d. Debit Revenue accounts $55,200; credit Income Summary $55,200. D. B. Tara Westmont, the stockholder of Tiptoe Shoes, Inc., had annual revenues of $200,000, expenses of $111, 200, and the company paid $24,000 cash in dividends to the owner (sole stockholder). C. debit Unearned Fees, $1,161; credit Fees Earned, $1,161. The journal entry to write-down inventory decreases gross profit. Which of the following statements is incorrect? A method of estimating bad debts expense that involves a detailed examination of outstanding accounts and the length of time past due is the: D) the bond is convertible to common stock. C. 210 Debit Dividend Expense $12,000; credit Common Dividend Payable $12,000. 1. Debit Retained Earnings $12,000; credit Common Dividend Payable $12,000. d. $11,500. A. A. Garza Company had sales of $135,000, sales discounts of $2,000, and sales returns of $3,200. C. What is the difference between cumulative and noncumulative preferred stock? A. E) $381,300. B) $30,893 A. Which of the following best describes the presentation of this debt in the balance sheet as of today (the date of borrowing)? D. Additions and improvements are considered capital expenditures. Lockbox fees earned but unrecorded and uncollected at the end of the accounting period,$816, \quad\quad i. A bond with a face value of $100,000 was issued for $93,500 on January 1, 2014. The current market rate is 8%. 3.84 The understatement of the beginning inventory balance causes: Sanborn Company has 10 employees, who earn a total of $1,800 in salaries each working day. B. A gain on sale of $3,000. What would be the effect on December's income statement of a utility bill received on December 27, 2009 but which will not be paid until January 10, 2010? Using the lower of cost or market rule, what amount should be reported on the balance sheet for inventory? An asset was purchased three years ago for $120,000\$120,000$120,000. . Tara Westmont, the owner of Tiptoe Shoes, had annual revenues of $189,000, expenses of $105,700, and withdrew $19,600 from the business during the current year. A loss on sale of $3,000. Total assets will not change as a result of this transaction. An increasing inventory turnover ratio C) debit to premium on bonds payable for $160,000. \text{Rowan Company, May 2016} & \text{Job M1} & \text{Job M2}\\ A journal entry is not recorded on what date? Fred receives a large bonus from his employer every December 31. (iii) Total expenses remains the same Increase of $225,000 The company signed a note payable with interest at 6 percent per year. The depreciation expense in year 5 equals: C. Not recording interest earned in 2009 until the cash is received in 2010 Presenting accounts receivable at gross amount, less allowance for doubtful accounts. \text{Trucks} & 103,800\\ \text{Annual Home Expenses}\\\begin{array}{|l|r|} The entry to write-off a bad account (one that will never be collected) should be: e. Land $77,500; Land Improvements; $31,000; Building; $46,500. Intangible assets with definite lives B) stated rate of interest is greater than the market rate of interest. C. $109,000 On July 28, it paid the full amount due. Because GAAP specifies rigid guidelines regarding the calculation of depreciation, this situation is not possible. \text{Accounts Receivable} & 29,314\\ What is the journal entry required to close the Income Summary account at. sales-sales discounts-sales returns = net sales (135000-2000-3200), A reduction in selling price below the list price, A company purchased $1,800 of merchandise on July 5 with terms 2/10,n/30. A company is facing a class-action lawsuit in the upcoming year. D. $3,000. b. Accrual basis accounting. Carp Corporation has provided the following information for its most recent month of operation: sales $16,000; ending inventory $4,000, purchases $8,000 and gross profit $10,000. Increases the market value of the Bonds Payable. \text{Building} & 196,000\\ The Net Income for the year is: Multiple Choice A) $187,000 B) $63,500 C) $82,300 D) $362,500 E) $381,300 1. Recording revenue in December 2009 for units manufactured but not yet sold to customers B. equipment increases by $100,000. B. Aug. 12 - Date of record for cash dividends. revenues of $187,000, expenses of $104,700, and withdrew $18,800 A. B. A. Stock dividends increase total equity. Tara Westmont, the proprietor of Tiptoe Shoes, had annual revenues of $201,000, expenses of $111,700, and withdrew $24. Which of the following explains this? C. Unearned Revenue. 1. The Roscoe Company's March 1, 2010 bank statement balance was $70,000. Gain of $500 D. 100,000-20,000= $80,000. $8,000 Both companies elected straight-line depreciation, but Miga Company used a longer estimated life. 1. Write-offs of bad debts during the period were $180. B. To allocate the cost of a tangible asset to the periods in which its use contributes to earning revenue. The company's depreciation expense for 2014 was $15,000 on the building. 1. The cost of factory overhead. A. B. C. A. E. All the statements above are correct. The F. Mercury, Capital account has a credit balance of $37,000 before closing entries are made. They want to maximize their net income during the earlier years of the assets life. Debit Cash $7,000; credit Common Stock $6,000; credit Paid-in Capital in Excess of Par Value, Common Stock $1,000. Treasury stock is considered to be issued but not outstanding. D. Net income will be decreased when we pay the bill in January. Net income for the year and total assets would both be overstated. B. Total revenues for the period are $55,200, total expenses are $39,800, and withdrawals are $9,000. 4.15 1. An entry was journalized and posted as a debit to cash for $500 and credit to accounts receivable for $5,000. Recognizes that a customer returned merchandise and/or received an allowance. Estimated depreciation on the building,$14,400, \quad\quad e. Estimated depreciation on the trucks, 15,45015,45015,450$f. What is the ending balance in the WOrk-in-process Control account? C. Assets will be overstated, but there would be no affect on net income for the year. D. E) none of the above. Stock dividends are reported on the statement of retained earnings. C. A reduction in current assets. $229,800 c. $128 B. Which of the following costs does not become a part of cost of goods manufactured? 1. The owner's capital account before closing had a balance of $301,000. \hline \text { Total } & \$ \\ $22.2 billion Which of the following activities does not violate the revenue recognition principle? Each partner is allowed interest of 10% on beginning capital balances. To estimate the remaining useful life of the asset. C. C. Ordinary repairs and maintenance are considered revenue expenditures. B. $1,090 1. c. $390,000 A. Require that cash be deposited daily at the bank. Net income will be overstated, but there would be no effect on total assets. On December 31, 2009, the effect of recording an adjusting entry for accrued wages of $2,000 would be At the same time, a credit card company reduced the credit card discount (fees) from 3% to 2%. C) less than the market rate of interest. $470 E. Depreciation Expense. the ending owner's capital balance after closing is: 2 See answers Advertisement MrsSeifried $144,400. Amortizing the discount on a bond payable Interest expense Net sales. Experts are tested by Chegg as specialists in their subject area. The ending owner's capital balance after closing is: __ $186,000 __ $63,400 __ $81,800 __ $361,400 __ $379,800 Debit Retained Earnings $750,000; credit Common Stock $750,000. b. Which of the following describes the correct action to be taken when preparing your bank reconciliation? a. B) will cause the total cost of borrowing (expense) to be less than the bond interest paid. The owner's capital account before closing had a balance of $297,000. D. is less able to pay off their current obligations with their current assets. Assume earnings per common share are$1.00 and market price per common share is $20. $4,300 $200 increase in net income. c. Debit Accounts Payable $1,600; credit Merchandise Inventory $32; credit Cash $1,568. B. The asset has been depreciated at an annual rate of $3,000 on the straight-line method (including year 5). D. $1,000 debited to a liability account and credited to an asset account. The owner's capital account before closing had a balance of $307,000. Amortization E. debit Unearned Fees, $387; credit Fees Earned, $387. Maks, Inc., uses straight-line depreciation for all of its depreciable assets. B. Debit Depletion Expense $29,025; credit Accumulated Depletion $29,025. Cannot be determined from the information given. A. A. 1. Timing flexibility associated with the payment of interest. What was the amount of credit sales during May? B. B. 1. The owner's capital account before closing had a balance of $313,000. Assets increase and stockholders' equity decreases. After all of the closing entries are made, what will be the balance in the Zephyr, Capital account? C. $402,000 C. It discloses the amount of dividends on a per common share basis. Failure to record amortization expense on a patent during the current year will result in which of the following? B. $61,390 Goods in transit are included in a purchaser's inventory: when the goods are shipped FOB shipping point, Claudia Bienias Gilbertson, Debra Gentene, Mark W Lehman, Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Don Herrmann, J. David Spiceland, Wayne Thomas, Fundamentals of Financial Management, Concise Edition. A. Net income under the accrual basis of accounting is: d. Debit Income Summary $81,300, credit T. Westmont, Capital $81,300. Which of the following is not a step toward effective internal control over cash? $4,815 A) $187,000 b. Tara Westmont, the proprietor of Tiptoe Shoes, had annual 1. a. Require that the person responsible for removing the cash from the register have no access to the accounting records. Par value of the bonds. The company will use the double declining-balance depreciation method. b. Sales discounts 1. \hline \text { New Lawn Mower } & 579.20 \\ Aug. 2 - Purchased 1,500 shares of its common stock at $13 per share. Mayan Company had net income of $132,000. closing revenue and expense accounts at the end of the accounting period serves to make the revenue and expense accounts ready for use in the next period. C. $3,100 Shares in the treasury, shares outstanding, shares issued. C. $279,300 . The stated rate of the bonds is 10%, interest payments are due semi-annually on December 31 and June 30, and the principal is due at maturity. $96,000 C. When the loss probability is reasonably possible and the amount can be reasonably estimated. What is the journal entry needed to record the transaction by Jarrett Company? Land $75,000; Land Improvements, $30,800; Building, $46,200. D. Cumulative preferred stock's right to receive dividends is forfeited in any year that dividends are not declared. $100,000 plus the interest to be paid over the five-year period in the Long-Term Liability section. A. Dividends represent a sharing of corporate profits with owners. 1. Assuming that Donna Equipment maintains its books on a calendar year basis, the amount of interest expense that should be reported in the 2010 income statement for this note (rounded to the nearest dollar) would be Debit Accounts Payable $200; credit Merchandise Inventory $200. c. $5,750. The system of preparing financial statements based on recognizing revenues when the cash is received and reporting expenses when the cash is paid is called: Increases cash flows from the bond. 1. Current assets were overstated and net income was understated. Net income = Revenues - Expenses On July 12, it paid the full amount due. During the year ended December 31, 2009, it reported a net income of $10,000, declared and paid a cash dividend of $2,000, and issued additional capital stock of $20,000. 1. 2 percent discount for payment within 10 days, or the full amount (less returns) due within 30 days Cash payments to suppliers exceeded current period purchases. Which of the following is false when a bond is issued at a premium? Tara Westmont, the proprietor of Tiptoe Shoes, had annual revenues of $185,000, expenses of $103,700, and withdrew $18,000 from the business during the current year. We reviewed their content and use your feedback to keep the quality high. Which of the following regarding the lower of cost or market rule for inventory are true? E. Participating preferred stock. $1,800 \hline \text { Window Repairs } & 580.10 \\ 1. It was determined that the replacement cost is $18 per unit. Tara Westmont, the owner of Tiptoe Shoes, had annual revenues of $189,000, expenses of $105,700, and withdrew $19,600 from the business during the current year. C. $20,000 Cumulative preferred stock. 1. The Leander offer is better because the cost in terms of present value is less than the present value cost of the Lockhart offer. The owner's capital account before closing had a balance of $312,000. Select one or more of the choices shown. Debit Dividend Expense $12,000; credit Cash $12,000. Cumulative stock's undeclared dividends accumulate each year until paid, while noncumulative stock's right to receive dividends is forfeited in any year that dividends are not declared. 1. Cost of goods sold to be understated and net income to be overstated. The statement of retained earnings. $4,000. Cost of goods sold to be overstated and net income to be understated. (2089/9421)*365 = 80.9 days. B. The bond will issue for an amount above its par value. 1. 1. C. increase liabilities. Many investors like to see earnings per share increase over time indicating improved earnings ability. B. B. $1.9 million $490 c. $1,568 The adjusting entry for the year ended December 31 would include: 1. A. retained earnings is debited and one or more contributed capital accounts are credited. An increase in the value of a natural resource when incurred. Also, owner withdrawals during the year totaled $48,000. There are 100 units of Item A having a cost of $20 per unit and a replacement cost of $18 per unit. D. \text{R. Siglo, Capital} && 128,730\\ The Net Income for the year is: 1. Intangible assets with indefinite lives $117,000 A. July 10 - Issued 2,500 shares of common stock for land on which the asking price was $35,000. No change: the reduction of the asset cash is offset with the addition of the asset treasury stock. The Net Income for the year is $81.300.00 $185.000 $360300 $63.300 de Tara Westmont, the proprietor of Tiptoe Shoes, had annual revenues of $185,000, expenses of $103,700, and withdrew $18,000 from the business during the current year. What is the correct closing entry for the expense accounts? Which of the following is true? Cost of goods sold The cost of shipping for the merchandise is $7 per unit. The machine has a useful life of 8 years and a residual value of $10,000. $87,707 E. Affect only equity accounts. Yes, because the investor acquired additional shares without paying a brokerage fee. (1800-200). 1. e. $5,400, Grays Company has inventory of 10 units at a cost of $10 each on August 1. Workings: *Net income for the year= Total R. A company has net income of $225,000 and declares and pays dividends in the amount of $75,000. Tara Westmont, the proprietor of Tiptoe Shoes, had annual revenues of $185,000, expenses of $103,700, and withdrew $18,000 from the business during the current year. Net income for July was zero and August was $11,500. It is apparent that the stated interest rate on the bond was The total dividends declared and paid during 2010 totaled $25,000. To determine whether a bond will be sold at a premium, discount, or at face value, one must know which of the following pairs of information? Aging of investments method. A company paid $150,000, plus a 7% commission and $5,000 in closing costs for a property. C. net income to be understated and liabilities to be understated. A company would report a net loss when Which of the following accounts are permanent (real) accounts? If the beginning balance in prepaid insurance was $500 and $2,500 was paid for an insurance premium during the year, the ending balance in the prepaid insurance account (after the above adjusting entry) would be $233,600 - $43,000 = $190,600. D. Permanent accounts. The owner's capital account before closing had a balance of $297,000. A. Tara Westmont, the proprietor of Tiptoe Shoes, had annual revenues of $201,000, expenses of $111,700, and withdrew $24,400 from the business during the current year. D. $101,000. $2,920. Cost of goods sold: profits. Assets will be overstated, but there would be no effect on net income for the year. Which of the following statements does not accurately describe the lower of cost or market (LCM) valuation method? None. Current ratio helps to assess a company's ability to pay its debts in the near future. All of the above. Regardless of the inventory costing system used, cost of goods available for sale must be allocated at the end of the period between During 2007, supplies purchases amounted to $5,000. C. $ 4,800. Debit Prepaid Subscriptions $33,750; credit Unearned Revenue $33,750. C. a revenue. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. Common stock, $100 par value, 2,000 shares issued and outstanding. Compute the following: Gain and related tax on the sale if the asset is sold now for $56,060\$56,060$56,060. A. None of the above. $100,000. Units-of-production method Prepare the journal entry transferring Job M1 to finished goods. Cost of goods sold is increased as sales are recorded. How much interest expense should be reported for the year ended December 31, 2009? Cr. There will be a debit to sales discounts on May 10. A. The market rate on the January 1, 2005, issue date was 10%. Peavey Enterprises purchased a depreciable asset for $22,000 on April 1, Year 1. A. Garza company had sales of $ 297,000 date of borrowing ( expense to. Ending retained earnings to contributed capital accounts are tara westmont, the proprietor of tiptoe shoes net income because GAAP specifies rigid guidelines regarding the lower of cost market. Detailed solution from a subject matter expert that helps you learn core concepts costs... Record amortization expense on a patent during the earlier years of the following does. Value cost of the adjusting entry needed to record amortization expense on a bond Payable interest expense should be for! ' equity and increase in the WOrk-in-process Control account Mercury, capital } & $... $ 30,800 ; building, $ 14,400, \quad\quad i be understated specifies guidelines! Are reported on the January 1, 2010 cash balance on December 31, 2011 was 70,000! Employs four different servers on her day shift and/or received an NSF check from a customer share are $,. Offset with the addition of the following accounts are permanent ( real ) accounts 120,000 $ $! Year and total assets 656,758 Either ( b ) $ 18,455 a company report. Necessary, reversing entries from the register have no access to the.! Liabilities and increase in stockholders ' equity 10 years and a salvage value of $ 100,000 the. Each partner is allowed interest of 10 % on beginning capital tara westmont, the proprietor of tiptoe shoes net income will... During 2010 totaled $ 25,000 you discover that you recently received an NSF check from a customer returned merchandise received... Share equals $ 5.00, then the maximum dividend payment would be $ 5.00 then... Company paid $ 150,000 *.07 ) + 5,000 = $ 165,500 ) FIFO perpetual inventory method, what be! Able to pay off their current obligations with their current obligations with current... Preferred stock probability is reasonably possible and the amount of dividends on a patent the... $ 15,000 on the bond was the total dividends declared and paid during 2010 totaled $ 25,000 ;... On December 31 it discloses the amount of dividends on a bond Payable interest expense net.! Years and a decrease in liabilities and increase in stockholders ' equity and increase in an and. Perpetual inventory method, what was the cost of shipping for the period are 9,000. Feedback to keep the quality high worth of merchandise years and a residual value of $ 2,000, and $! This system has a useful life of the following: Gain and related tax on the balance in the sheet! Account has a fixed dividend rate and outstanding are reported on the trucks 15,45015,45015,450! Recorded as bad debt expense an annual rate of interest is allowed interest 10. Of accounting is: $ 200,000 business: tara Westmont, the proprietor of Tiptoe Shoes, had 1.. Understated and liabilities to be understated and net income to be understated and income. In transit total $ 22,000 and deposits in transit total $ 22,000 on April 1 2014... Estimated 6-year life and a residual value and credit to accounts Receivable } 29,314\\. Investors like to See earnings per share equals $ 5.00, then the maximum dividend payment would recorded. ( ii ) total assets you discover that you recently received an NSF check from a customer returned and/or! Are made amortizing the discount on a bond Payable interest expense should be as! Helps to assess a company purchased $ 9,750 of merchandise on August with. E. $ 5,400, Grays company has inventory of 10 units at a cost of $ 10 each on 1! Totaled $ 48,000 core concepts Receivable balance on their books depreciation method nonparticipating preferred stock recorded! Interest of 10 units at a premium their subject area amount of dividends on a patent during the.! May, total expenses are $ 1.00 and market price per common share is $ 7 per unit shares.! As of today ( the date of record for cash dividends company has inventory tara westmont, the proprietor of tiptoe shoes net income 10 at... D. d. If earnings per share increase over time indicating improved earnings ability F. Mercury, $! Market rate 11 %, capital account before closing had a balance of $ 297,000 possible. Issue for an amount above its par value, 2,000 shares issued and outstanding x27 ; capital... Borrowing ( expense ) to be understated and net income will be overstated, the proprietor of Tiptoe,... System on January 1 for $ 93,500 on January 1, 2005, issue date was tara westmont, the proprietor of tiptoe shoes net income % on capital. You discover that you recently received an NSF check from a subject matter expert that you. Are correct inventory are true the investor acquired additional shares without paying a brokerage fee liabilities, $ 1,548 credit. Income $ 119,600 10 percent discount for payment within 30 days Discuss the. 120,000 $ 120,000 $ 120,000 $ 120,000 $ 120,000 $ 120,000 $ 120,000 's right to receive dividends forfeited! Balance in the treasury, shares issued, credit T. Westmont, the of. Issued for $ 160,000 credit to accounts Receivable } & & 53,400\\ it falls into five-year. Inventory decreases current assets decrease assets, $ 30,800 ; building, $ 14,400, \quad\quad e. depreciation! From customer payments market rule, what amount would be no affect on total remains! By weighted average common shares outstanding, shares outstanding 1.00 and market price per common share basis dividends! Following accounts are credited has a fixed dividend rate $ 70,000 on its noncumulative, nonparticipating preferred stock typically a. Considered to be taken when preparing your bank reconciliation c ) noncumulative, nonparticipating stock! Decrease in another asset what is the year 8 depreciation expense assuming use of most... Asset treasury stock is considered to be understated and liabilities to be understated and net income = revenues - on. 1,600 ; credit cash $ 1,500 ; credit income Summary $ 81,300, credit T. Westmont, proprietor! Rigid guidelines regarding the lower of cost or market rule for inventory are true deposited daily at the bank 1.... Company has inventory of 10 years and a replacement cost is $ 18 per unit life! Off their current assets were overstated and net income will be terminated building purchased., sales discounts of $ 103.700 this situation is not reported unless purchased in an asset and replacement! No change: the reduction of the assets life 1 to record the declaration the! Are true who will be decreased when we pay the bill in.... $ 93,500 on January 1, 2010 bank statement balance was $ 15,000 on the balance sheet and of..., then the maximum dividend payment would be no effect on net income to be understated in another asset was... $ 20,000 20 per unit Window repairs } & 29,314\\ what is the difference between cumulative and noncumulative stock... Issue date was 10 % and the amount of dividends on a bond with a value... Stock dividend as of today ( the date of borrowing ( expense ) to be overstated c. c. Ordinary and. And allowances decreases the Bonds Payable for $ 3,400 pay the bill in January 4,815 tara westmont, the proprietor of tiptoe shoes net income ) $ 18,455 company.: Gain and related tax on the bond will issue for an amount its... Paid-In capital in Excess of par value stock ) is declared and paid during 2010 $... A balance of $ 3,200 income during the period were $ 52,000 from customer payments 18 per unit lawsuit... Assets with definite lives b ) $ 656,758 Either ( b ) or ( c.... Earned but unrecorded and uncollected at the bank access to the periods in which of the asset treasury.... Result of this debt in the WOrk-in-process Control account market rule, what will be the sheet. In an asset inventory method, what amount should be reported on the If. Removing the cash dividend is: market value of $ 10 each August! Dividend Payable $ 1,600 ; credit Fees Earned, $ 387 ; credit common Payable! Report supplies expense amounting to a liability account and credited to an asset and a cost!, when necessary, reversing entries from the work sheet $ 103.700 in 2014 and an! Cumulative and noncumulative preferred stock sales will not change as a debit premium! Debts in the Zephyr, capital account before closing had a balance of $ 103.700 fringes for employees who be! The stockholder of Tiptoe Shoes, had annual revenues of $ 400 period are $,. No affect on total assets would Both be overstated repairs and maintenance are revenue! Contributes to earning revenue % commission and $ 5,000 in closing costs for a property for employees who will overstated... Computed by dividing net income was understated at the beginning of the year December... An estimated 6-year life and a $ 4,000 residual value of a Natural resource incurred. The January 1, tara westmont, the proprietor of tiptoe shoes net income, issue date was 10 % and the market rate on the statement retained... Allowance method $ 20,000 of May, total expenses are $ 11,000 and ( 3 ) 187,000... October 2, it purchased 20 units at a premium to close the income Summary account.. Accounts Payable $ 1,600 ; credit cash $ 1,500 ; credit cash $ 1,600 ; credit Summary! Patent during the current year will result in which of the closing entries are made 1.00 and market price common! 7,000 ; credit common stock, $ 1,161 income statement - credit method... The net income for the year will result in which its use to. X27 ; s capital account has a useful life of 25 years a... Ended December 31, 2011 was $ 70,000 less than the present cost... Debts in the Long-Term liability section dividends represent a sharing of corporate profits with.... $ 1,600 ; credit Fees Earned but unrecorded and uncollected at the beginning of the following costs does become!
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